Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Eleonora Rosati, Annsley Merelle Ward, Neil J. Wilkof, and Merpel. Nicola Searle is currently on sabbatical. Read, post comments and participate! E-mail the Kats here

The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy

Tuesday, 28 February 2017

Hola! The International Trademark Association (INTA) is heading to Barcelona, Spain in May for its 139th Annual Meeting. From Saturday, May 20 through Wednesday, May 24, over 9,500 global intellectual property professionals from 190 countries will convene for five days of meetings and events. Early Bird registration, which offers discounted registration pricing, closes this Friday, March 3rd.

While INTA has a Brussels office and thousands of members in Europe, this will mark its first meeting in the Iberian Peninsula. The Fira Gran Via Conference Centre will serve as the center of meeting activity, including the Opening Ceremony and Welcome Reception, committee meetings, Table Topics, business meetings, educational sessions, the Trademark Scholarship Symposium and workshops, including a ‘Patents for Trademark Lawyers’ session, a new patent professionals networking reception, and numerous exhibitors. This year will mark the inaugural Lunch and Learn sessions covering innovative topics including issues beyond intellectual property. The Grand Finale will be held at Barceloneta Beach. As always, network opportunities will abound.

The Annual Meeting provides additional educational and outreach opportunities focused on certain audiences, including the popular International Course on Trademarks. For brand owners and government, officials, there will be an exclusive Anticounterfeiting workshop titled, "Strategy + Collaboration: The Key to Success against the Crime of Counterfeiting." There will also be open sessions with IP office officials from around the world.

INTA has negotiated special travel rates to Spain for attendees using the Star Alliance Network. Each registered attendee will receive complimentary public transportation passes to use throughout Barcelona, including all travel to the central conference hub, the Fira Gran Via Conference Centre. If one plans to arrive in Barcelona early, on Friday, May 19th, between 9:00 am and 1:00 pm. there will be an INTA’s customs training session, exclusively for corporate members, who will conduct brand identification trainings with local Spanish authorities in small, interactive groups.

As noted above, the Early Bird registration will not be extended beyond the deadline of Friday, March 3. For more information, visit www.inta.org/2017AM

Eleonora Rosati invites readers to attend “European copyright – quo vadis?”, which will take place on 28 and 29 April 2017 in beautiful Florence. It will discuss Article 11 (press publisher’s right) and Article 13 (so-called “value gap”) contained in the Proposal for a Directive on copyright in the Digital Single Market.

Katfriend Nedim Malovic analyses the Universal Music Ltd and others v B2 Bredband AB case, PMT 11706-15, which considered the grant of an injunction to block access to The Pirate Bay and Swefilmer websites.

Katfriend Kevin Wong gives his insights on Audi AG v Lim Ching Kwang, [2017] SGIPOS 2, TM No. T0911230B. This Singapore case ruled on the revocation and invalidity of the trademark “AOne” based on the lack of genuine use and bad faith in filing the application.

Nicola Searle reviews the book entitled “The Informal Economy in Developing Nations”, edited by Erika Kraemer-Mbula and Sacha Wunsch-Vincent. The book provides an interesting approach regarding the innovations generated in the informal market and the challenges for developing a policy to protect them under the IP laws.

Katfriend Vanessa Delnaud highlights the main differences between the copyright law in the United Arab Emirates and in common law countries, focusing on ownership of works made by employees, the assignment of future copyright and the waiver of moral rights.

Katfriend Okan Can summarizes the recent changes contained in the new Turkish IP Code of Industrial Property regarding trademark law, such as the registrability requirements and various features relating to opposition, cancellation, infringement and criminal proceedings.

Never Too Late 135[week ending on Sunday 12 February] Playing Polo with potential defendants | KYLIE trade mark battle spinning around | When the IP community reaches out to the broader public: the story of IDIA in India | Too big to pay? Employee-inventor compensation in the Court of Appeal | Willow Tea Rooms: A tale of tea and trade marks (Part 2) | BREAKING: AG Szpunar advises CJEU to rule that The Pirate Bay makes acts of communication to the public | No more counterfeiters! Chanel, Apple, Bayer, LVMH (and more) write to President Juncker on revision to IP Enforcement Directive | Is German SEP litigation set to increase with the "confidentiality club decision" of the Higher Regional Court of Düsseldorf? | Trying to find balance? Come to UCL IBIL's copyright panel on Wednesday | After Sweden and Germany, GS Media finds its application in the Czech Republic

Never Too Late 134[week ending on Sunday 5 February] | Around the IP Blogs | King Tut's tomb: conservation or replication (but don't forget the "aura")? | The next round of Cartier: UK Supreme Court will hear appeal re costs of intermediary injunctions | New National IP Strategic Action Plan in China | Full decision of Enlarged Board of Appeal in partial priority / poisonous divisionals referral (G01/15) published | INGRES Conference Part II - Trade Secret, Copyright, Design and Trade Mark Law Developments | 5 mistakes to avoid in IP student essays ... and not only there | INGRES Conference Part I - European Patent Law Developments | Remembering Masaya Nakamura, the "Father of Pac-Man" | Monday Miscellany

Never Too Late 133[week ending on Sunday 29 January] | IP Summit 2016 (First Part) | When a quote becomes famous: even if it was never quite said that way | The trademark licensing question that won't go away: the standing of a licensee to sue | Would you like a side of Mr Justice Arnold on SPCs with your wind turbine? Teva v Gilead, Abraxis v Comptroller and Wobben v Siemens kick of 2017's patent cases | AIPPI (UK) Event: 2016's patent cases - all you really need to know | BREAKING: CJEU rules that EU law does NOT prevent punitive damages in IP cases | Supreme Court rules Act of Parliament is needed to initiate UK leaving the EU | Book review: "From Maimonides to Microsoft: The Jewish Law of Copyright Since the Birth of Print" | Applications for information on infringers can be made outside of IP infringement proceedings | The Michael Jordan case in China – to be continued | Around the IP Blogs | Sunday Surprises

For Kat readers who agonize whether prolixity or brevity is the better approach in drafting court appeals, IP practitioners in Spain have now been given their marching orders. Kat friend Colm Ahern of Elzaburu in Madrid summarizes that the Spanish Supreme Court has decided—long appeal briefs are out (but footnotes are finally in).

“On January 27th, the Spanish Supreme Court published new regulations on appeals, which for the first time restrict the length of the appeal to 25 pages. This is likely to be received with horror by some IP attorneys, who have been quite accustomed to sending in at least three times that much. The Court complains about the “exorbitant length” of many appeals, which—

"far from facilitating judgment, increase the level of difficulty during the admission phase, hamper correct understanding of the appellant’s petitions, add confusion to the debate and frequently provoke that the really relevant arguments remain hidden in an accumulation of reiterated or even contradictory pleadings”.

Surely not? The Court backs up its decision with an explicit reference to article 481.1 of the Civil Procedural Act which, paradoxically, calls for the legal grounds to “be set forth with the necessary length”. As if all this were not upsetting enough, attorneys are now faced with a regulation restricting the font size to “10 points in footnotes”. The upsetting part is of course not the 10-point font, but rather the very idea that footnotes might be used in a court submission. Such literary innovations have long been considered heresy by a profession which prides itself on tradition.

However, the new regulations are not limited to style and consolidate many substantive improvements in access to appeal. In the past, this depended entirely on meeting the technical criteria laid down in the statutory rules concerning economic value or contradiction of precedent. The Court will now in exceptional circumstances consider appeals where, “in the opinion of the Supreme Court”, there exists a need to create or modify case law due to the fact that the “social reality or the common opinion of the legal community has evolved in relation to a certain matter”. Although standard fare in other jurisdictions, this exercise of court discretion is the exception rather than the rule in Spain, which up to now has clung to the idea of a numerus clausus. The grounds of appeal were limited to those explicitly provided for by statute. This had not changed and the court has no discretion to refuse to allow appeals to proceed if these grounds are met. Indeed, this is a central aspect of the constitutional right of access of the citizens to the courts, one of the resounding successes of Spain’s democratic system.

These changes are evidence of the continuing modernization of the Spanish court system, which will be warmly welcomed by IP practitioners. As these ideas trickle down to the lower courts, they can only add to Spain’s current advantage in relation to the speed of proceedings: 12 to 14 months for a first instance judgment in a patent or trademark case, provided one picks the right court. This is due in no small measure to the fact that the Spanish procedure is one of the most front-loaded in the world – all documentary evidence and expert reports must be supplied with the claim, with no opportunity to do so later or to change legal and factual pleadings.”

Sunday, 26 February 2017

The American comedian Rodney Dangerfield was most identified with his iconic line-—“I don’t get no respect.” He would have been so jealous of the
clothespin, also called a “clothes peg”, or simply “peg”, depending upon where you live. For a generic product (can any Kat reader recall any clothespin brand?) whose market is inexorably shrinking, it still draws attention from publications such as the New York Times and, just recently, The Economist. In 1998, the Smithsonian institute’s National Museum of American History carried a display—“America’s Clothespins”--, which included 41 patents dealing with clothespins for the period between 1852-1887 (although the child of one visitor was heard to say-- “What’s a clothespin, Dad?”) All of this points to a fascinating tale of how patents served as a linchpin (with a Kat apology for the unintended pun) for the rise of the American of State of Vermont, nestled in the northwestern corner of New England, as, in the words of the New York Times, “the Silicon Valley of 19-century clothespin technology”.

As recounted, clothespins first appeared in the 19th century. Before then, wet laundry was simply laid out to dry on bushes, tree limbs and other available natural platforms. The earliest clothespin patent issued in 1832 in the name of Samuel Pryor, being a bent strip of wood held together by a wooden screw, fashioned in one piece and which held the wet clothes by virtue of a gripping action. Unfortunately, as described by Anita Lahey, the devise was impractical because “… even dampness would cause the screw to swell, rendering the pin inoperable.”

The breakthrough occurred in a patent issued to David Smith in 1853. Smith, a resident of Vermont who was a prolific inventor in a number of different fields, described the defect of the then-current form of clothes as frequently being “detach[ing] from the clothes by the wind as is the case with the common pin and which is a serious evil to washerwomen.” His solution was a two-piece device, which contained two prongs with a small spring wedged in between. In the words of the patent—

“By pushing the two superior [upper] legs together the inferior [lower] ones are opened apart so that the instrument can be safely placed on the article of clothing hanging on the line. This done the pressure of the fingers is to be removed so as to permit the reaction of the spring C to throw the inferior legs together, and cause them to simply grasp the piece of clothing and the line between them.”

It seems that some mass manufacture (in the terms of mid-19th century America) of clothespins had begun already in the 1840’s. Try as he could, this Kat could not find any account directly connecting Vermont with such manufacture before Smith’s invention. However, this Kat’s historian instincts suggest that already at least some of this production was taking place there, if for no other reason than the availability of lumber in the forests dotting the state. As well, that Smith chose to make an invention regarding clothespins points to the presence of at least a nascent industry as a spur for his inventive talents. In other words, the components were already being put into place for Vermont to become the center of the clothespin industry.

While further patents issued sought to improve on Smith’s design to better performance of the spring, durability (the winter in Vermont can be rugged) and means of manufacture, the key breakthrough took place on in 1887. Then, Solon E. Moore came up with an improved form of device, what he called a “coiled fulcrum”. It can be no accident that Moore was also from Vermont. The clothespin industry was presumably all around, just waiting for someone like Moore to give it one further substantial push to enhance its design and lower manufacturing costs. Moore’s invention seems to have perfectly filled the bill. As Moore described his invention, it was--

“… an improved article of manufacture, the clothes-pin described, consisting of the two clamps having the fulcrum-recess on their inner sides about midway of their length, the line-grooves in the beveled jaws, and the transverse grooves a on their outer sides in rear of the said line-grooves, and the spring composed of a single wire coiled at D, with the tangential arms E at opposite ends of the coil, with angular branches f at their outer ends, to engage the sides of the clamps and 5 prevent lateral displacement thereof, and the terminal parallel branches 9, oppositely directed to engage the grooves 011 the outer sides of the said clamps, substantially as specified.”

A flurry of industrial activity soon followed. The United States Clothespin Company was established in 1887 to produce Moore’s improved design. In the face of what is described as vigorous competition from other Vermont-based manufacturers of clothespins, the company was the industry leader, at least for time. In 1909 (after the Moore patent had presumably expired), an employee of the company, Allan Moore, apparently not a relation to Solon Moore, more (bad Kat pun once again) or less, walked across street and established a rival, the National Clothespin Company, whose hallmark was an improved and less expensive means for manufacture of the spring fulcrum. Allan Moore’s company overtook The United States Clothespin Company as the industry leader. By virtue of a reservoir of experienced labor, know-how, an ever-seeking inventive environment, as well as Vermont-based lumber, the state had become the Silicon Valley of wooden clothespins.

But its pre-eminence was short-lived. After World War I, European competitors, especially those from Sweden, could manufacture wooden clothespins for less. The automatic clothes dryer diminished demand in various markets. The United States Clothespin Company closed for good in the 1940’s. Later, Chinese imports became a further challenge. The National Clothespin Company held on until 2009 as the last U.S. manufacturer of wooden clothespins, although it still makes clothespins of the plastic variety. By then, Vermont as the Silicon Valley was long a thing of the past. [Still, it is worth noting that except for the Wikipedia entry for "Clothespin", which does not provide citations for some of these facts, this Kat found no corroborating on-line information, except for reports that the company had ceased manufacture of the wooden clothespin in 2009.] Be that as it may, maybe all that remains are patent citations, as late as in a 1998 filed application citing the Smith patent.This is testimony both to just how pathbreaking these 19th century patents were, but also the limits of how far even the most innovative patents can take an industry, whether or not it was the Silicon Valley of its time.

Neil reviews John Murphy’s book Brandfather:
The Man Who Invented Branding.
In his book Murphy describes his career from a job in
corporate planning to the creation of a brand naming, such as PROZAC and ZENECA,
and trademark prosecution company to the establishment of Interbrand and, in
particular, the development of the field of brand valuation.

Intern Kat Verónica Rodríguez Arguijo
continues her report from the 11th edition of the Pan-European Intellectual
Property Summit which took place on 1st and 2nd December at the World Customs
Organization in Brussels.

Never Too Late
135 [week ending on Sunday 12 February] | Playing Polo with potential defendants I
KYLIE trade mark battle spinning around I When the IP community reaches out to
the broader public: the story of IDIA in India I Too big to pay?
Employee-inventor compensation in the Court of Appeal I Willow Tea Rooms: A
tale of tea and trade marks (Part 2) I BREAKING: AG Szpunar advises CJEU to
rule that The Pirate Bay makes acts of communication to the public I No more
counterfeiters! Chanel, Apple, Bayer, LVMH (and more) write to President
Juncker on revision to IP Enforcement Directive I Is German SEP litigation set
to increase with the "confidentiality club decision" of the Higher
Regional Court of Düsseldorf? I After Sweden and Germany, GS Media finds its
application in the Czech Republic

Never Too Late 134[week ending on Sunday 5 February] |
King Tut's tomb: conservation or replication (but don't forget the
"aura")? | Willow Tea Rooms: A tale of tea and trade marks Part 1 |
The next round of Cartier: UK Supreme Court will hear appeal re costs of
intermediary injunctions | New National IP Strategic Action Plan in China |
Full decision of Enlarged Board of Appeal in partial priority / poisonous
divisionals referral (G01/15) published |INGRES Conference Part II - Trade
Secret, Copyright, Design and Trade Mark Law Developments |5 mistakes to avoid
in IP student essays ... and not only there | INGRES Conference Part I -
European Patent Law Developments | Remembering Masaya Nakamura, the
"Father of Pac-Man"

Never Too Late 133[week ending on Sunday 29 January] |
IP Summit 2016 (First Part) | When a quote becomes famous: even if it was never
quite said that way | The trademark licensing question that won't go away: the
standing of a licensee to sue | Would you like a side of Mr Justice Arnold on
SPCs with your wind turbine? Teva v Gilead, Abraxis v Comptroller and Wobben v
Siemens kick of 2017's patent cases | AIPPI (UK) Event: 2016's patent cases -
all you really need to know | BREAKING: CJEU rules that EU law does NOT prevent
punitive damages in IP cases | Supreme Court rules Act of Parliament is needed
to initiate UK leaving the EU| Book review: "From Maimonides to Microsoft:
The Jewish Law of Copyright Since the Birth of Print"| Applications for
information on infringers can be made outside of IP infringement proceedings|
The Michael Jordan case in China – to be continued

Never Too Late 132[week ending on Sunday 22 January] |When
this Kat doesn't know, he reaches out to Kat readers: what really happened at
the dawn of modern commercial trademark use? I Social media,
"WikiLeaks" and false news in the 18th century: Thomas Jefferson and
the "Mazzei letter" I Does the economic impact of SPCs necessitate
SPC Regulation reform? The European Commission wants to find out I A look at
the proposal for the ePrivacy Regulation I BGH: to cease means to recall I
Never too Late x2 I Around the IP Blogs

Saturday, 25 February 2017

'Quo vadis' is not only the title of an epic film (adapted from a classic novel), but also a Latin phrase that means 'where are you going?'.It is now the title of a workshop [that I have helped organizing] that has three irresistible features:

The workshop will provide a forum for discussion and exchange of opinions between policy makers and academics, as well as representatives of business and non-governmental sectors. It will consist of keynote addresses, panel presentations, and roundtable discussions alike.

First there was metadata, then there was Google AdWords, the latest High Court dispute concerns the question: can the adverts which are displayed on a website constitute trade mark infringement?

Back in 1992, Argos Systems Inc (ASI), an American company specialising in CAD systems for the design and construction of buildings, registered the domain argos.com. Several years later in 1996, Argos Limited, a well known UK retailer registered argos.co.uk. Argos owned various EU and UK trade marks for ARGOS but was too late to the domain name party to secure the .com.

Between December 2008 and January 2012, ASI's website included Google AdSense ads to all visitors. From January 2012 to December 2014, the website settings were reconfigured so that only visitors from outside the Americas saw the Google ads. The vast majority of visitors to argos.com came from the UK and Ireland with the majority of these visitors (83%) immediately leaving the site. Argos was understandably suspicious that the Google ads were left on for visitors outside the Americas with the intention of generating advertising revenue from Argos' name. They were particularly peeved that some of the adverts which appeared on argos.com were for Argos itself and its competitors. Argos alleged free riding and damage to the distinctive character and reputation of its trade marks.

ASI relied heavily on an indemnity in the contract between Google and Argos which conferred third party rights on ASI.

Not to be confused with...
Odysseus' dog

Can domain name + Google ads = trade mark infringement?

Argos argued that the combination of the domain name argos.com plus Google ads (some of which included ads for Argos or Argos' competitors) amounted to trade mark infringement. This allegation failed for two main reasons: (1) Argos had consented to the use when it signed Google's terms and (2) in any event there was no targeting of UK consumers.

How did Argos consent?

It was common ground that the use of the domain alone was insufficient to establish trade mark infringement (or passing off). In order to succeed in its claim, Argos needed the domain name plus something else.

The judge found that:

when it signed up to Google's advertising service, Argos had expressly and unequivocally consented to ASI's use of ARGOS in its domain plus adverts for Argos' goods and services. Therefore any claim founded on adverts for Argos appearing on argos.com was 'doomed to fail' because the Claimant had consented to this use.

The clear terms in the AdWords terms, the judge noted that it had been open to Argos to block its ads from appearing on argos.com but had declined to use this feature.

Even if Argos did not have direct knowledge of where its ads were appearing this knowledge was available to its advertising agency and was attributed to Argos under ordinary agency principles.

The judge was careful to point out this decision did not mean that by agreeing to the AdWords terms, advertisers were consenting to the display of other people's adverts on any third party website.

If Argos had been able to establish that the Google adverts concerned Argos' competitors it might have been a different result. However, the only evidence of competitor adverts appearing from Argos.com occurred following deliberate manipulation of the cookies (i.e. deleting browser history and searching for competitor websites).

Why was ASI not targeting the UK?

or the Ben Affleck film

Argos accepted that without the display of Google adverts it had no case on targeting. The question of targeting was objective rather than subjective. It was assessed from the perspective of the average consumer. The judge considered there to be two types of average UK Internet user (i) enquiring and (ii) unenquiring. The first would assume some connection with their browsing history if they saw a third party advert on a website. The second would not worry about the reason for the ad being there.

The Judge noted that the majority of the visitors to ASI's website did so in error - UK consumers assuming that argos.com would be owned by Argos. ASI obtained traffic to its site due to the domain name which they had lawfully registered. The adverts which appeared on Argos.com could be divided into:

those for Argos which Argos had consented to when it signed up for Google AdWords;

those clearly not aimed at UK consumers (e.g. because the price was in dollars);

those which may be aimed at UK consumers;

those which were definitely aimed at UK consumers but were obtained as a result of cookie manipulation.

“In
a 2016 judgment[commented on IPKat
here] the Stockholm District Court (Patent- och Marknadsdomstolen) rejected
an application to issue an injunction against a major Swedish internet access
provider, Bredbandsbolaget (B2), to block access to torrent site The
Pirate Bay and streaming portal Swefilmer.

The rightholders in this case (including, amongst others, Universal
Music, Sony Music Entertainment, Warner Music, and Nordisk Film) had brought a
joint action in which they claimed that B2 - by supplying internet connection
to its own customers (thus enabling access to The Pirate Bay and Swefilmer) -
was aiding and abetting (objectively) infringements of their copyrights.

The Stockholm District Court dismissed the claimants’ action and
rejected the request to order B2 to block access to those sites. This was on grounds
that it was not possible to determine whether B2 has knowledge of third-party infringements.The first instance court also rejected the claimants’
submission that Swedish law is incompatible with EU law for not allowing
blocking injunctions, and ruled out that the decision by the Court of
Justice of the European Union (CJEU) in Telekabel[also discussed here]could have any relevance to the present case.

The appeal judgment: in brief

In what can be considered a landmark ruling, on 13 February 2017 the Swedish
Patent and Market Court of Appeal (Patent- och Marknadsöverdomstolen) reversed
the first instance decision, and ordered B2 to pay SEK 500,000 [approx EUR 53,000]
to the rightholdersand block access to The Pirate Bay and Swefilmer for the next three years. The
decision cannot be appealed and is therefore final.

The court noted that it is indeed possible under EU law for
rightsholders to obtain an injunction [pursuant to Article 8(3) of the InfoSoc Directive] against an
intermediary whose services are used to commit a copyright infringement, even
if the ISP only provides its customers with internet access.

This also means that there is no need for a contractual requirement, or any
other relationship, between the intermediary and the third-party infringer [recently, the CJEU
has confirmed this in Mc Fadden, here,
and – in the broader context of Article 11 of the Enforcement Directive – Tommy Hilfiger, here].

Will pirates have a harder time now?

Then the court turned to Article 53 b of the Swedish Copyright Act and said that
this provision should be interpreted in light of EU law. The result is that an
intermediary, that supplies access to copyright content unlawfully provided by
third parties, should be regarded as “participating” in the infringing activity.
It follows that it should be possible to issue an injunction against such an
intermediary. In contrast with the first instance ruling, the Court of Appeal
also stated there is also no need establish an intermediary’s own criminal
liability (for aiding and abetting the users’ infringements) for an injunction
to be issued against it.

The court then considered whether it was proportionate to issue the
injunction in the case at hand.In this
regard, it highlighted the importance of striking an appropriate between the fundamental
rights to (i) copyright protection; (i) receive/impart information; and (ii) to
conduct one’s own business.Because the
services of the intermediary were used to make works available without
the rightholders’ consent it was considered to be proportionate to issue an injunction.

The reasoning of the Court of Appeal

More specifically, the Court began its analysis by discussing relevant
provisions and CJEU case law on Article 8(3) of the InfoSoc Directive (“Member States shall ensure that rightholders
are in a position to apply for an injunction against intermediaries whose
services are used by a third party to infringe a copyright or related right.”)

The
CJEU decision in Telekabelclarified that “an intermediary that provides
access to content which third parties’ made available through its services on
the internet is an intermediary whose services are used by a third party to
infringe copyright or related rights within the meaning of Article 8(3) of the
InfoSoc Directive”.

In
that case the CJEU also clarified that Article 8(3) of the InfoSoc Directive
does not set out a requirement for there to be a special circumstance, such as
a contractual relationship between the intermediary and the third party, or
that it must be shown that third parties are taking part in unlawful activity
using the services of the intermediary.

Furthermore,
the CJEU in Tommy Hilfigher held that there is an obligation for Member States to ensure that
intermediaries whose services are used by third parties to infringe
IPRs, irrespective of the intermediaries’ own potential
responsibility for the activity at issue, may be forced to take measures to the
ensure that the infringements stop and also take measures to prevent new
infringements.

Articles
12-14 in the E-commerce Directive set out
exemptions from liability (safe harbours) in favour of mere conduit, caching
and hosting providers. Article 12(3) provides however that the safe
harbour should not affect the possibility for a court or administrative
authority, in accordance with the Member States legal systems, to require a
certain provider to terminate or prevent an infringement.

This
reading has been recently confirmed by the CJEU in Mc Fadden (para 79).

Hence EU law…

…
intends to provider rightsholders with a high level of protection, also by
enabling national courts to issue injunctions against intermediaries whose
services are used by third parties to commit infringements. In this regard the court
emphasized that Recital 59 in the preamble to the InfoSoc Directive provides
that “[t]he conditions and modalities relating to injunctions should be left to
the national law of the Member States”.

The
Court thus turned to Article
53 b (first sentence thereof) of the Swedish Copyright Act. This provisions
states that “[u]pon a petition by
the author or his or her successor in title or by a party that, on the basis of
a license, has the right to exploit the work, [a] Court may issue an injunction
prohibiting, on penalty of a fine, a party that commits, or contributes to, an
act constituting an infringement or a violation referred to in Article 53 to
continue that act.”

The Marleasing
principle and the Swedish Copyright Act

When
implementing the InfoSoc Directive into the Swedish legal system, the Swedish Government
decided not to use the same language of Article 8(3), but rather phrase Article 53 b in the sense of
allowing an injunction to be granted against those who commit copyright
infringements and those who aid and abet such infringements.However, as opposed to what the first instance court thought, this national
provision must be interpreted in light of EU law (Marleasing principle) and there is no
requirement for the claimant to demonstrate that the defendant did so through
action or other active conduct. The court said that this conclusion was
confirmed by both the preparatory works to Article 53 b and the InfoSoc
Directive.

In conclusion the court
found that Article 8(3) of the
InfoSoc Directive requires that an internet intermediary such as an access
provider may be subject to an order to block access to The Pirate Bay and
Swefilmer. The requirement of proving a certain relationship between the intermediary
and the infringing third party should be considered incorrect/obsolete. The
court also ruled out that rightholders would need to prove that the intermediary’s
customers have accessed the works (a condition stated instead by the first
instance court).The
injunction enters into force on 28 February and will be in place for three
years. The decision may not be appealed since the Patent and Market Appeal
Court is in principle the last instance court in IP cases."

The common reading of the ECJ's (yes) recent judgment in case C-367/15 - OTK is that the Enforcement Directive (Directive 2004/48) does not compel Member States to introduce punitive damages for infringement of intellectual property rights, but allows for national law to impose punitive damages (see, e.g., the case reports on IPKat or Kluwer Patent Blog).

But a closer reading of the decision casts some doubt on this common understanding. In the answer to the question (for the background of the case see the IPKat post), the ECJ states "Article 13 of Directive 2004/48/EC ... must be interpreted as not precluding national legislation ... under which the holder of an intellectual property right that has been infringed may demand from the person who has infringed that right either compensation for the damage that he has suffered ... or, without him having to prove the actual loss, payment of a sum corresponding to twice the appropriate fee which would have been due if permission had been given for the work concerned to be used."

In the grounds for the decision, the Court further elaborates (paras. 29-31, emphasis added):

In addition, without there being any need to rule on whether or not the introduction of ‘punitive’ damages would be contrary to Article 13 of Directive 2004/48, it is not evident that the provision applicable in the main proceedings entails an obligation to pay such damages.

Thus, it should be pointed out that, where an intellectual property right has been infringed, mere payment of the hypothetical royalty is not capable of guaranteeing compensation in respect of all the loss actually suffered, given that payment of that royalty would not, in itself, ensure reimbursement of any costs — referred to in recital 26 of Directive 2004/48 — that are linked to researching and identifying possible acts of infringement, compensation for possible moral prejudice (...) or payment of interest on the sums due. Indeed, OTK confirmed at the hearing that payment of twice the amount of the hypothetical royalty is equivalent in practice to compensation of an amount remaining below what the holder would be able to claim on the basis of ‘general principles’, within the meaning of Article 79(1)(3)(a) of the UPAPP.

It is admittedly possible that, in exceptional cases, payment for a loss calculated on the basis of twice the amount of the hypothetical royalty will exceed the loss actually suffered so clearly and substantially that a claim to that effect could constitute an abuse of rights, prohibited by Article 3(2) of Directive 2004/48. It is apparent, however, from the Polish Government’s observations at the hearing that, under the legislation applicable in the main proceedings, a Polish court would not be bound in such a situation by the claim of the holder of the infringed right.

From the first sentence emphasized in the passages cited above it becomes clear that the Court of Justice explicitly did not address the issue of whether Article 13 of the Enforcement Directive prohibits punitive damages, because according to the Court, the amount payable in the present dispute does not amount to punitive damages.

Looking closely

The second emphasized sentence makes clear that a "compensation" that substantially exceeds actual damages suffered may constitute an abuse of right. This sounds harmless enough - but to assess whether the hypothetical (double) royalty exceeds the actual loss suffered, the actual loss needs to be calculated, and that is exactly what provisions setting a hypothetical royalty want to do away with, because it is difficult and costly. It also raises the question of burden of proof - generally, the burden of proof for losses suffered lies with the party claiming compensation (typically the rightsholder). Where the law provides for a double royalty payable irrespective of actual loss suffered, the burden of proof that the double royalty "substantially exceeds" the actual loss is however an exception that needs to be proven by the party invoking the exception, i.e. the infringer.

In sum, the judgment in C-367/15 - OTK leaves room for debate whether the statutory damages due in a specific case are permitted under the Enforcement Directive, and it specifically does not address whether "punitive" damages are permitted under the Enforcement Directive.

Thursday, 23 February 2017

Disputes involving the IP rights of spare parts dealers have challenged courts and registries for decades. An interesting instance with respect to the use and rightful proprietorship of a registered trademark occurred recently in Singapore in the case of AUDI AG v Lim Ching Kwang. Kat Friend Kevin Wong, of Ella Cheong LLC has kindly shared his thoughts on this case.

"In the Intellectual Property Office of Singapore case of AUDI AG v Lim Ching Kwang [2017] SGIPOS 2, German car maker AUDI AG applied on 31 March 2015 to revoke and declare invalid Registration No. T0911230B for a stylised trade mark “AOne”, in the name of Lim Ching Kwang, a spare parts trader. The mark is registered in respect of Classes 7 and 12, of which the proceedings involved only the latter class. The grounds for revocation and invalidation are respectively Section 22(1)(a) and (b), and Section 23(1) read with Section 7(6), of the Trade Marks Act (TMA).

Revocation--In respect of the revocation application, the Registrar had to decide whether the mark has been put to genuine use in relation to the Class 12 goods it covers during the period of non-use alleged by AUDI. Taking into account all the relevant circumstances and the evidence tendered by Lim, including emails, quotations, purchase and delivery orders, invoices, and pictures of packaging boxes labelled with the mark, the Registrar found that Lim has made genuine and not mere token, colourable or internal use of the mark in relation to torque rod bushes during the relevant period.

The Registrar disagreed with AUDI’s argument that an instance of Lim’s use of “AOne” in plain font in an e-mail quotation does not constitute use of the stylised “AOne” mark as registered, stressing that the adduced items of evidence must be considered in totality. The Registrar was also sufficiently convinced that, on the balance of probabilities, another instance of Lim’s sale of torque bushes to a local company involved use of the mark as labelling on box packaging for the goods. This is even though the fact that “AOne” brand label stickers were shipped to Singapore together with torque bushes, when looked at in isolation, does not show that such use materialised. As noted, the evidence must be considered in totality.

Nevertheless, as Lim failed to show use of the mark in respect of all the Class 12 goods covered by his registration, the Registrar proceeded to decide that the limitation of the specification to “torque rod bushes” would be fair for the use made. AUDI therefore partially succeeded in revoking Lim’s registration with effect from 19 January 2015, save for this lone item.

Invalidation--As for the invalidation action, the Registrar had to decide whether the mark was applied for in bad faith. AUDI’s case was that Lim’s specification is overwhelmingly broad in reproducing the entire list of Class 12 goods in the Alphabetical List of the Nice Classification, and clearly it cannot be a realistic or bona fide intention to use the mark for all the goods. To support this, AUDI further relied on the modest scale of Lim’s business, judging from its paid-up capital.

The Registrar held that it is baseless to conclude that a specification is too broad merely because it encompasses all the goods in the Alphabetical List of the class concerned. Neither is paid-up capital a reliable indication of the present and future trading capacity of a business. Furthermore, it is legitimate and not prohibited by law to seek registration encompassing present as well as intended future uses of a mark, and applying for a specification wider than current trading scope does not impute a departure from established principles of ethical conduct or honesty in commercial dealings.

Although the mere length or breadth of a specification is no basis for a conclusion of bad faith, the Registrar further held that a lack of intention (at the time of filing) to use a mark for all the goods claimed can constitute bad faith, given that the form of application for registering a mark incorporates a declaration of actual or bona fide intention to use. Given Lim’s legitimate spare parts business and market expansion intentions, coupled with the lack of evidence of unconscionable conduct or moral impropriety on Lim’s part, the Registrar decided that the high standard of proof for a bad faith claim has not been met. AUDI therefore failed in this invalidation action.

This case illustrates how non-use of a trade mark can attract loss of registration rights. It also reflects the burden of proof associated with bad faith allegations, and warns that broad specifications may be scrutinised for bad faith allegations."

Neil Wilkof invites Kat friend Professor Shamnad Basheer, a noted figure in the Indian IP community, to report on the story of the Indian organization – “Increasing Diversity by Increasing Access to Legal Education (IDIA)” that was founded by him.

Last week, a group of around 80 of the world’s best known consumer brands wrote to the President of the European Commission calling for action in tackling counterfeiters. Annsley Merelle Ward brings Catriona MacLeod’s report on the key points that merit attention.

Never Too Late 134[week ending on Sunday 5 February] | King Tut's tomb: conservation or replication (but don't forget the "aura")? | Willow Tea Rooms: A tale of tea and trade marks Part 1 | The next round of Cartier: UK Supreme Court will hear appeal re costs of intermediary injunctions | New National IP Strategic Action Plan in China | Full decision of Enlarged Board of Appeal in partial priority / poisonous divisionals referral (G01/15) published |INGRES Conference Part II - Trade Secret, Copyright, Design and Trade Mark Law Developments |5 mistakes to avoid in IP student essays ... and not only there | INGRES Conference Part I - European Patent Law Developments | Remembering Masaya Nakamura, the "Father of Pac-Man"

Never Too Late 133[week ending on Sunday 29 January] | IP Summit 2016 (First Part) | When a quote becomes famous: even if it was never quite said that way | The trademark licensing question that won't go away: the standing of a licensee to sue | Would you like a side of Mr Justice Arnold on SPCs with your wind turbine? Teva v Gilead, Abraxis v Comptroller and Wobben v Siemens kick of 2017's patent cases | AIPPI (UK) Event: 2016's patent cases - all you really need to know | BREAKING: CJEU rules that EU law does NOT prevent punitive damages in IP cases | Supreme Court rules Act of Parliament is needed to initiate UK leaving the EU| Book review: "From Maimonides to Microsoft: The Jewish Law of Copyright Since the Birth of Print"| Applications for information on infringers can be made outside of IP infringement proceedings| The Michael Jordan case in China – to be continued

Never Too Late 132[week ending on Sunday 22 January] |When this Kat doesn't know, he reaches out to Kat readers: what really happened at the dawn of modern commercial trademark use? I Social media, "WikiLeaks" and false news in the 18th century: Thomas Jefferson and the "Mazzei letter" I Does the economic impact of SPCs necessitate SPC Regulation reform? The European Commission wants to find out I A look at the proposal for the ePrivacy Regulation I BGH: to cease means to recall I Never too Late x2 I Around the IP Blogs

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